Should you borrow against the cash value of a
permanent life insurance policy?

Insurance sales representatives will often cite the
ability to borrow against a permanent life insurance
policy's cash value as a positive. People who purchase
such policies with the intent to borrow against them,
however, are really planning to borrow from their own
beneficiaries. The death benefit is reduced for
beneficiaries if there is a loan outstanding against the
policy. This is counter to the very idea of life
insurance - which is to provide protection for your
survivors if you die. In general, borrow against a cash
value policy only as a last resort.

Brenda Procter, M.S., Consumer and
Family Economics, College of Human Environmental
Sciences, University of Missouri-Columbia

If you'd like to learn more about this and other
personal finance topics, the University of Missouri
offers 'Personal & Family Finance,' a correspondence
course, through the Center for Distance and Independent
Study (800-609-3727). Information about this course is
available at
http://cdis.missouri.edu/CourseInfo/DetailCourseInfo.asp?1985.